Reuters: G7 wants to set a price limit for Russian oil at the level of $65-70 per barrel

The G7 countries propose to establish a price limit for Russian oil at the level of $65-70 per barrel. Currently, this proposal is being discussed in the European Union.

Reuters writes about this with reference to its own sources.

The ambassadors of the 27 EU member states are now trying to reach an agreement on such a proposal in order to come up with an official joint position by the end of the day. Australia should also join the EU and G7.

The idea behind the price cap is to prevent shipping, insurance and reinsurance companies from handling cargoes of Russian oil if it sells for more than the price set by the G7 and its allies.

Since the worldʼs key shipping and insurance companies that trade crude oil are based in the G7 countries, such a price cap would make it difficult for Moscow to sell its oil at a higher price. The vast majority of its oil is transported by tankers, not pipelines.

At the same time, since the cost of production is estimated at about $20 per barrel, Russia will continue to produce and sell oil, which will prevent a shortage in the market.

• Starting December 5, an embargo on the supply of almost all oil from Russia will enter into force in the European Union. Only Hungary, Slovakia and the Czech Republic will retain the temporary right to supply oil from the Russian Federation through the pipeline.
• It is expected that on November 23, the G7 countries will announce the maximum price level for Russian oil.